Business Partnership And Taxes

Hi Everyone. I am starting a company with a friend of mine. I am doing all the technical work and he is providing all the startup money. My question is how should we be keeping records for our taxes. The paypal account is in my name but we will be splitting profits 50/50. I don't want to get stuck paying taxes on 100% of the profits if I am giving away half of it to my business partner.

Does anyone know what is usually done in these situations?

I am a CGA (certified general account) in the country of Canada so I am not sure about how the procedure is in the USA.

In Canada if your paypal account is set in your name then yes you will be paying for all of the taxes but all of your net profit will be going into one account in your books.

All of the money in that account is not considered yours or your partners until you move it into a personal account. So all you would have to do is take half the number of the taxes and have the number taking off of the amount your partner takes from net profit into a personal account.

Not sure if that helped any.

Find yourselves a good tax agent who is also a lawyer. Have him draw up a suitable contract outlining each individual's share of expenses and profits.